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Wednesday, February 06, 2013

Wisdom from the (Gratefully) dead

Over the years I have had a lot of fun examining the remarks and scribbling of various literary, sports and market giants for useful advice. We have looked at quotations and outbursts from such luminaries as Earl Weaver, Hunter Thompson, Jimmy Buffet and even Travis McGee for some clues as to the meaning of it all and potentially profitable ideas with entertaining results. They are fun to write and force me to think  about meaning, context and even application of the remarks to various aspects of life and living.

Recently my fevered and perhaps mildly hung over brain began working on the spark of an idea to increase idea generation and writing output. Why not work on a series of these things selecting unlikely celebrities and literary figures and apply this little exercise on a regular basis? It seems to me that perhaps it would make a great writing and thinking exercise. It might be, or it could just be another one of those dumb ideas I practice for a bit before letting it slip into the circular file of history. We shall see.

The difficult choice was with whom to start this process. HL Mencken comes to mind as he had a sharp mind, acerbic with and a lot to say about a lot of things. Twain is always a possibility. Serge Storms has had some awesomely applicable quotes as a character in Tim Dorsey’s happily demented books. Chandlers Marlowe got off some gems as did Robert Parkers Spenser. Dylan and Prine have some cool lyrics that would be fun to riff about for a bit. Odds are we will get to all those if I am not lynched by denizens of the interwebs before we get there.

To truly set the tone for this series I think we need to look for life and market clues in the most unlikely dark and dusty corners of thought and prose. We will start our exercise with Grateful Dead lyrics as one of my proudest moments is still working Dead Lyrics into an article on the stock market. I love the Dead and have seen them several times live, and even remember a portion of several of the concerts,so we will start with a little interpretation of their tie dyed wisdom. Keep in mind that these will be my very liberal interpretation I may even spin the meaning to make my point. Don’t like? Don’t read it.

Talk about your plenty, talk about your ills, One man gathers what another man spills

Being a deep value guy and something of a vulture when it comes to the markets I almost had to lead with this one. I am constantly confounded that the value approach to the markets, as simple and profound to say nothing of successful as it is, simply eludes most people. They chase the popular, the exciting, and the volatile  well know situations that everyone else is trading. Odds that they end of up with different results, or even positive results over time, are minuscule  It is the guys who clean up the spills that seem to make the most money over time and they are far less frenetic and stressed in the process.

It is the companies that fall out of the index, that are ignored, spilled to the side by the bigger funds and the wannabe Soros and Cohen types that end up providing the best long term returns for investors. Spill away my friends, I need the money.

I may be going to hell in a bucket, baby, but at least I'm enjoying the ride.

Of course the world is going to hell in a hand bucket. It always has been and always will be. The collective ills and problems of the human race are overwhelming at any given moment in history. Deficits. Democrats.Republicans. European Woes. Arab Spring turns to Arab Nightmare. Global Warming. Mass shooting. Gun control.  Do you really think we are so unique or that our life is that much worse or more perilous that the generations that came before or will come after?

Try this out. Nazis. Great Depression, Slavery. Mongol Hordes. The Panic of 1907. 100 years’ war. The black plague. Cold war. Ice Age. Civil War. Typhoid epidemic. Prohibition.  Stalin and the great purge. Mao’s cultural revolution.  Polio.

 In the grand scheme of things the vast collection of humanity is going to always be experiencing bad shit. There will be wars, there will politics and other diseases that ravage our species. It has ever been, and ever shall be thus. Mankind starts fights, spreads disease and invents religions to justify and feebly explain it all. There will be hatred, greed, political parties and big banks as long as there is man. There will be wars, disease, shopping malls and chain restaurants as long as man dominates this planet. And there is not one happy damn thing we can do about it. The world will always be going to hell in a handbucket.

But we can enjoy the ride. Although the collective misery of the world will touch us from time to time we can live in a much smaller slice of humanity. We can live out our life surrounded with those we love and like and ignore the happy mess outside the door. There one hell of a lot of things to like about life. Great books, good music, soft kisses, sunsets, cold gin, poetry, sunsets, baseball, children (during those moments we don’t want to lock them in a little box until they leave home anyway), palm trees, holding hands, pelicans, alligators, dock bars, funky local eateries, Sunday morning coffee and newspapers, and the list goes on.

I can sit and fret about the worlds ills and woes or I can enjoy a good book , or even a bad one, while listening to Miles Davis, while my wife lies her head in my lap and watches a great movie. I can worry about how some dick headed trader at Goldman is going to do to blow up the world tomorrow or I can buy stuff that’s really cheap and take an afternoon nap. I can fret about which religion is most determined to kill me or mine or I can check the load in my guns and go off to watch a spring training game and enjoy the world born brand new on the diamond once again.

We are born, we live, we die and the world is a shitty place with the exception of that little corner of love music, literature and baseball we can build for us and ours.

When life looks like easy street, there is danger at your door

Having been in and around the markets a good deal of my adult life this is one to which I can relate easily. The fat man and the band probably didn't know they were singing about Wall Street when they penned these lines but they are. I have seen it too many times in my life not to appreciate that when you finally think you have it licked and all will be yours you are about to get royally and painfully screwed. Every time I meet someone who tells me they have found a new system or approach that is going to give them surefire winners that lead to a quick fortune, there is a temptation to kiss them on the cheek in the manner of a Mafia Don ordering a hit. They are about to die. It will be a messy nasty death as the markets once again attempts to teach the hard lesson no one ever learns.

I have known many people who were the absolute best at what they do. Most of them are humble people who do not speak of their greatness. Those that have bragged to me about being the best, or the smartest, soon suffer the fate of being relegated to the grave while still alive. If you are fortunate enough to be good at something, then be good at it. But keep your mouth shut. Cycles change and markets, like the world, adapts. Fate is a fickle bitch with a distaste for those who claim to have thwarted her so best accept your rewards quietly and humbly.

Sometimes the lights all shining on me, other times I can barely see

  This is life in a single sentence. There will be highs, lows and in betweens. Some time you will be standing on the stage in the center of the spotlight accepting the accolades of the world. Others you will be in the dank corner of the darkest cell wondering what the hell went wrong. Some evenings will find you sipping champagne on the deck of the ship and others will find you curled under the table chewing ground glass and swilling rotgut through your tears. Life is just like that.

You can attempt to smooth it all out but why would you?To pass on taking risks, chasing your dreams for fear of falling short, eschewing love to avoid heartbreak, avoiding friendship to avoid treachery, all of these sound like a poor miserable life. Many achieve it, settling for life in the bureaucracy or corporate middle, never rising, never falling very far, never feeling that deepest of pain but it comes at the cost of never feeling the grandest of joys. You can stay firmly on the ledge your whole life but the mystery and beauty of life is on the peak and in the darkest corners of the valley.

The trouble with you is the trouble with me, got two good eyes, but you still don't see

This is another fat man lyric I can easily apply to the markets. So much of what works is readily observable but no one want so see it. The simple truth is that if you buy sound companies when they are out of favor and cheap and just wait long enough you will almost always do well in the markets. The problem is we all want it quicker than that and in a manner that makes look like some kind of super fucking genius guru. Our short term mindset also works against us in our endeavors. The casino is open so we must play damn it! To hell with patiently waiting for assets to experience a resource conversion or to generate higher income levels over time. The quarterly number fell short of my expectations so I must sell. The company has a new wonder widget everyone likes this week so I must buy regardless of price.

The path to long term gain is actually pretty obvious. Build cash until the market experiences one of the hundred year storms we get every three or four years and buy companies for a fraction of their actual value. Most do not have the patience or are so blinded by the desire for quick gains and glory they just cannot do it.

Of course it applies to life as well. Get rich quick schemes are actually get poor quicker plans. If she looks like a treacherous slut she probably is one. If he looks like Larry the Lounge Lizard odds are that’s exactly what he is. If it looks too good to be true 99.9% of the time it is. If you think a politician may be lying he is. If your business associate gives off an air of dishonesty, hide your wallet. Much of life is obvious if we only use our eyes and intuition.

The Dead have so many great lyrics that I will just close with one more. This sums up the best way to live in my humble opinion and perfectly describes the blue print for a happy life. Think this one through and you will find answers to questions you didn't know you had.

Put your money where your love is

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